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NewStar Reports First Quarter 2013 Net Income Of $6.2 Million, Or $0.12 Per Diluted Share

  • Revenue Growth – Risk-adjusted revenue 1 in the first quarter increased 7% from the prior quarter and 11% from the first quarter of the prior year
  • Loan Growth – Net loan growth from the prior quarter was 2%, or 7% on an annualized basis, despite a slowdown in new loan volume to $147 million amid a fall-off in market activity
  • Margins – Net interest margin narrowed to 4.11% in the first quarter from 4.58% in the prior quarter due primarily to lower amortization of deferred loan fees associated with decrease in loan prepayments
  • Credit Trends – Provision for credit losses declined $5.2 million from the prior quarter, reflecting continued variation around longer term cyclical trend
  • Asset Management - Formed a new managed credit fund on April 4, 2013 to co-invest in middle-market commercial loans originated by NewStar

BOSTON, May 1, 2013 (GLOBE NEWSWIRE) -- NewStar Financial, Inc. (Nasdaq:NEWS), a specialized commercial finance company, today reported net income of $6.2 million, or $0.12 per diluted share for the first quarter of 2013. These results compare to net income of $6.2 million, or $0.12 per diluted share in the fourth quarter of 2012 and $6.1 million, or $0.12 per diluted share in the first quarter of 2012. Income before income taxes (pre-tax income) was $10.4 million for the first quarter of 2013 compared to $10.3 million in the fourth quarter of 2012 and $10.4 million in the first quarter of 2012.

"Our results this quarter reflected consistent earnings and improved loan growth despite a significant slowdown in our target markets as the rush to complete deals in the fourth quarter appears to have dampened overall transaction activity in early 2013 as expected," said Tim Conway, NewStar's Chairman and Chief Executive Officer. "Despite the slow market, we grew the loan portfolio at a 7% annualized pace in the quarter and risk-adjusted revenue growth remained solid. Credit performance was also good as provision expense decreased, reflecting a positive variance to a longer term cyclical trend line." he added. "We also continued to strengthen our competitive position, launching a new $300 million credit fund that will co-invest in loans that we originate as we continue to provide more capital to customers," he concluded.

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